Moving forward after SCOTUS’s student loan forgiveness ruling
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CounterCurrent:
Forgive Us Our Debts?
Moving forward after SCOTUS’s student loan forgiveness ruling
CounterCurrent is the National Association of Scholars’ weekly newsletter, bringing you the biggest issues in academia and our responses to them.
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Category: Student Loan Forgiveness, Supreme Court; Reading Time: ~3 minutes
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** Featured Article - SCOTUS’s Loan Forgiveness Ruling and the Path Forward ([link removed])
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Last week, I wrote to yo ([link removed]) u about Students For Fair Admissions, Inc. v. President and Fellows of Harvard College ([link removed]) , the Supreme Court decision that continues to be a contentious topic of conversation. This week, we have another landmark SCOTUS ruling to unpack: Biden, President of The United States, et al. v. Nebraska et al ([link removed]) . There are a lot of rapid-fire policy and legislative decisions being handed down for higher education right now, so let’s take a moment to step back and reflect.
On June 30, the Supreme Court struck down in a 6-3 decision the Biden administration’s student loan forgiveness plan. This plan would have forgiven $10,000 of student loans for borrowers making less than $125,000 per year, and $20,000 for those who had received a Pell grant. The Biden administration claimed a 20-year-old law as the authority for its plan, a law that allows the Secretary of Education to “waive or modify” loan terms during a war or national emergency (i.e., the COVID-19 pandemic).
Andrew Gillen, in an article ([link removed]) last week for Minding the Campus, summarized the ruling and analyzed what it means for higher ed (it’s worth a full read). From a policy standpoint, student loan forgiveness was always a bad idea. Gillen writes,
It used the real financial struggles of a small portion of borrowers as an excuse to shower almost all college graduates with an unearned windfall. It ignored income-driven repayment plans—which guarantee payments are always affordable—that already exist and that are used by a third of borrowers. It would have exacerbated the problem it was supposedly solving, as forgiveness would encourage students to borrow even more (anticipating future forgiveness) and colleges to raise prices, both of which would lead to even higher student loan debt in the future. The cost was massive, pegged at around half a trillion dollars. It was also regressive, benefiting high earners more.
But even though student loan forgiveness was terrible policy, the most important takeaway is that the Court majority determined that there was standing to sue, and that the Secretary of Education didn’t have the authority to implement the Biden administration’s plan.
Striking down the student loan forgiveness plan was the best possible scenario. However, whether it will stick as precedent for future cases remains to be seen. The worry is that until the federal government gets out of the student loan market, there is no long-term solution. Policies are proposed and implemented so quickly that it’s like watching a whiplash-inducing game of ping pong. “Progressives will continue to throw anything and everything at the wall, hoping something sticks,” says Gillen ([link removed]) , “[a]nd if there is a more permissive statute somewhere, or a change in the balance of the Supreme Court, it’s only a matter of time before something does stick.”
There are still plenty of problems that plague academia, many of which are caused by excessive legislative overreach and progressive political activism on campus. “The federal government’s policies are the single biggest factor in the ruinous increase in college costs, including both tuition and student fees, in the last thirty years,” reads our policy recommendations in Freedom to Learn ([link removed]) . The loan forgiveness case isn’t the first, or the last, attempt by the government to meddle in the affairs of higher education. Unsurprisingly, the Biden administration has already announced a new student loan forgiveness plan ([link removed]) , so we will wait to see the snags the plan runs into (which it certainly will).
It will take time to digest the implications of this decision, much like those of the Students For Fair Admissions decision. The hope is always that higher education will come out better and stronger in the long run—with a return to upholding the values necessary to give students the best possible education.
Until next week.
Kali Jerrard
Communications Associate
National Association of Scholars
Read the Full Article ([link removed])
For more on government policy and student loans in higher education:
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July 08, 2023
** Congressional Republicans Step Up to the Plate ([link removed])
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Andrew Gillen
Republicans in both the House and the Senate have recently released a slew of new legislation focused on reforming higher education.
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July 06, 2023
** “Forgive Us Our Debts”: Biden flouts SCOTUS with a new student loan forgiveness plan ([link removed])
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Richard Vedder
The Biden–Cardona fatwa is problematic, not just because of its fiscal irresponsibility, but also its brazen contempt for the rule of law and civil, respectable behavior.
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January 09, 2021
** Report: Freedom to Learn ([link removed])
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The National Association of Scholars
This report provides a guideline of 40 detailed suggestions for legislative reforms. These initiatives, if enacted by Congress, would encourage reform of America's costly, politicized, and dysfunctional system of higher education.
** About the NAS
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The National Association of Scholars, founded in 1987, emboldens reasoned scholarship and propels civil debate. We’re the leading organization of scholars and citizens committed to higher education as the catalyst of American freedom.
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